BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks saw further weakness yesterday as sentiments stayed insipid with few catalysts for market players to follow.
As a result, selling still held the upper hand, sending the FBM KLCI closer to the psychological 1,500 points level and market breadth on the negative territory.
The broader market was mixed, but technology stocks rebounded strongly in tandem with similar gains in the sector’s equities overseas. Volumes, meanwhile, stayed low-to-moderate.
With the market devoid of noteworthy leads, coupled with ongoing concerns over the unrelenting pandemic conditions, the equity market is set to remain on a low gear for longer.
As it is, investor sentiments are still feeble due to the damage the ongoing pandemic is causing to the country’s economy that may require an extended duration to recover.
Consequently, we think the downside bias will still be prevalent, dampened by the uncertain economic and corporate earnings outlook that would deter fresh buying and leave the key index to potentially drift lower over the near term.
This also means the 1,500 support remains in play and if it is breached, the next support is at 1,495 points. The hurdles, on the other hand, remain at 1,520 and 1,530 points respectively.
Malacca Securities Research
The FBM KLCI trended lower on the back of the alarming rise in COVID-19 daily cases, overshadowing optimism on the improving vaccination rates in the country.
We reckon the local bourse should continue to trade in consolidation mode until Malaysia could transition into Phase 2 in the National Recovery Plan.
Meanwhile, the market may watch a series of China’s economic data which will be released today.
Commodities-wise, crude palm oil (CPO) price climbed above the RM4,000 level in line with soybean futures, while crude oil price staged a pullback.
The FBM KLCI slid amid continuous jittery sentiment as the key index consolidated above the 1,500 level.
Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI was hovering closer to the 30 level.
With investors staying on the sidelines, we expect the key index to trade within resistance set at 1,525-1,548 and the support at 1,500. – July 15, 2021
